The Swiss National Bank revived the threat of currency intervention, reminding markets that it won't stand back and watch the franc climb indefinitely.

The central bank's president, Philipp Hildebrand, warned in a statement Monday that the SNB will "continue to prevent any excessive appreciation of the Swiss franc against the euro," pushing the franc a little lower in early European trading.

The comments do little more than repeat the currency stance adopted last December. However, as they come after a smooth climb in the franc in the opening week of 2010, they act as a strong reminder that positive bets on the franc aren't a one-way trade.

"This is a reiteration of the fact that they are still watching the market," said Geoffrey Kendrick, a currencies analyst at Swiss bank UBS in London. "It increases the risk of unilateral intervention [to weaken the franc]."

The SNB's currency policy has shifted in recent weeks. For most of last year, it said it would step in to prevent "an appreciation" of the franc against the euro -- a trend that makes imports cheaper and exacerbates deflation. Indeed, it is believed to have intervened to crimp the franc several times in 2009, most notably in March.

However, in December, the SNB said it would act only to counter "an excessive" strengthening of the Swiss currency, a subtle but significant change in tone taken by many traders as a green light for positive bets on the franc. Partly as a result of that change, the euro fell below the SNB's perceived tolerance limit of 1.50 francs toward the end of December, and it has fallen further since. The euro hit 1.4725 francs Monday, its lowest since March 2009. Midafternoon in New York, it traded at 1.4745 francs, from 1.4753 francs late Friday in New York and 1.4825 francs at the end of 2009.

Mr. Kendrick said he sees the franc climbing further, in part because of the chance that Swiss interest rates will rise in the third quarter and in part because Swiss banks are actively buying francs as they sell overseas assets to strengthen their balance sheets.

Credit Suisse economist Fabian Heller said he expects the SNB to gradually phase out unusual policy measures, such as foreign-exchange interventions, that have been in place since March.